Permanent Supportive Housing with Project Based Voucher Assistance June 13, 2008

QAP Mechanisms to Create Permanent Supportive Housing Permanent Supportive Housing Set-Aside –25% of the State’s total credit ceiling –Non-statutory –May be eligible for PBV assistance Ten percent (10%) Supportive Housing Requirement –All LIHTC project will be required to target 10% of the total units to Supportive Housing Tenants –Excludes tax-exempt bonds –May be eligible for PBV assistance

Supportive Housing Set-Aside General Application Information Non-eligible Populations – Elderly only projects are excluded Populations Served – Minimum 35% of the units targeted to supportive housing initiatives. Additional points for having more than 75% supportive housing units. (See definitions outlined in Addendum IIIa, Attachment A)

Supportive Housing Set Aside General Application Information cont. Project size – Not exceed 75 units under the Supportive Housing set-aside. Service Organization Collaboration – Assuring adequate service coordination and delivery for tenants. Site Selection – See Tab C under the Combined Application for MSHDA’s Site Selection Criteria.

Supportive Housing Set-Aside Threshold Requirements Addendum IIIa Application – Only supportive housing proposals under the Set-Aside are required to submit Addendum IIIa. Letters of Support – From Continuum of Care or community group, endorsing project, and from service provider’s funder(s) if applicable.

Supportive Housing Set-Aside Threshold Requirements cont. Memorandum of Understanding (MOU) – Agreement between owner, service provider, and the property manager. Service Coordination Plan – On site service coordination must be available to all supportive housing tenants. Minimum schedule standard recommended: –One day per week – 30 units or less –Two days per week – units –Three days per week – units

Supportive Housing Set-Aside Threshold Requirements cont. Additional Threshold Requirements: See Section VIII-A of the Qualified Allocation Plan (QAP) for additional requirements which must be followed. For SH Set-Aside proposals, the Inclusion Plan, Item #1, is not required. Scoring and Ranking – Set-aside proposals will be scored under Addendum IIIa, not under Addendum I. See Scoring Summary, Attachment C under Addendum IIIa.

(10%) Supportive Housing Threshold Requirement 10% Requirement: All projects with allocated tax credits (excluding elderly projects and projects using tax-exempt bond financing) will be required to target ten percent (10%) of the total units to Supportive Housing Tenants. General Threshold Requirements: See Section VIII- A of the QAP for threshold requirements that must be followed including: –Inclusion Plan: Owners must demonstrate a partnership with a local lead agency and complete an Inclusion Plan, which includes: a.Description of how the project will meet needs of the targeted tenants b.Description of the experience of the lead agency and their capacity to provide access to supportive services

(10%) Supportive Housing Threshold Requirement cont. c.A Memorandum of Understanding (MOU) d.Certification that participation in supportive services will not be a condition of tenancy. e.Agreement for 60 day vacancy holding period for special needs tenants f.Agreement to maintain separate waiting list g.Agreement to affirmatively market to persons with disabilities

(10%) Supportive Housing Threshold Requirement cont. h.Agreement to include a section on reasonable accommodation in application for tenancy i.Agreement to accept Section 8 vouchers or certificates j.A description of how to make targeted units affordable to persons whose incomes are limited to those from a disability-based-source

Inclusion Plan Required after tax credit award – An acceptable plan is due within 120 after the tax credit award. Collaborative Effort – Owner, Management Agent, and Lead Agency Lead Agency – Agrees to act as a provider, coordinator or referral agent

PBV Assistance May 2008

PBV Requests Due Date: Requests for PBV assistance must be made to the Office of Supportive Housing between now and July 15, Conditional Commitment: Upon review of the requested PBV assistance, Supportive Housing will provide a conditional commitment for your tax credit application.

PBV Threshold Standards Selection of PBV Proposals - LIHTC, and/or MSHDA HOME. Eligible Units - Available only for special needs units as defined in MSHDA’s Addendum IIIa. Term of Assistance – Ten (10) year initial term, with five (5) year extensions. (Subject to annual appropriation)

PBV Threshold Standards cont. Ineligible Units: –Shared housing; –Units on the grounds of a penal, reformatory, medical, mental, or similar private or public institution; –Nursing homes or facilities providing continuous psychiatric, medical, nursing services, board and care or intermediate care; –Units that are owned or controlled by an educational institution or its affiliate and are designated for students by the institution; –Manufactured homes; –Cooperative housing; and –Transitional housing

PBV Threshold Standards cont. Prohibition of Assistance for Units in Subsidized Housing: –A public housing dwelling unit; –A unit subsidized with any other form of Section 8 assistance (tenant based or project based); –A unit subsidized with any governmental rent subsidy; –A unit subsidized with Section 236 rental assistance payments. However, they may attach assistance to a unit subsidized with Section 236 interest reduction payments; –A unit subsidized with rental assistance payments under Section 521 of the Housing Act of 1949, However, they may attach assistance for a unit subsidized with Section 515 interest reduction payments; –A Section 202 project for non-elderly persons with disabilities, or elderly; –Section 811 project-based supportive housing for persons with disabilities; –A unit subsidized with any form of tenant-based rental assistance (TBRA);

PBV Threshold Standards cont. Site Selection Criteria – MSHDA’s Site Selection Criteria must be met. See Tab CC of the Combined Application Addendum IIIa or Inclusion Plan – Proposals under the PSH Set-Aside complete the Addendum IIIa, all other PSH proposals must submit the Inclusion Plan. Environmental Reviews – Proposals must meet the Authority’s Environmental Review (See Tab D of the Combined Application), and NEPA and related applicable federal laws and authorities in accordance with 24 CFR 58.5 and 58.6.requirements.

PBV Threshold Standards cont. Housing Accessibility – Must comply with program accessibility requirements of Section 504 of the Rehabilitation Act of 1973, and implementing regulations at 24 CFR part 8. Housing Quality Standards – Each unit must be inspected for compliance with HQS before executing the Housing Assistance Payment (HAP) Contract. Labor Standards – Nine (9) or more PBV assisted units triggers Davis Bacon requirements

PBV Threshold Standards cont. Income Limits – Currently, income eligibility is lesser of federal poverty or 30% of AMI. –Proposed change to the PHA plan includes that a minimum of 85% of the PBV assisted units must be occupied by households with incomes at or below 30% of Area Median Income (AMI), with the remainder at or below 50% of AMI.

PBV Threshold Standards cont. Rent to Owner – For a tax credit development outside a QCT, rent to the owner will be the lowest of: –The tax credit rent minus utility allowance; –The reasonable rent; or –The rent requested by the owner

PBV Threshold Standards cont. Rent to Owner – For a tax credit development within a QCT, rent to the owner will be the lowest of: –An amount determined by MSHDA, not to exceed 110 percent of the applicable FMR for the unit bedroom size minus any utility allowance; –The reasonable rent; or –The rent requested by the owner

PBV Threshold Standards cont. Subsidy Layering – All proposals with PBV assistance are subject to a HUD subsidy layering review.

PBV Underwriting Considerations Feasibility/Commitment – Under the MSHDA Taxable Loan Program, feasibility will be based on rents targeted within the tax credit application for scoring purposes. Mortgage Term/Prepayment – Standard Direct Lending Programs (TEAM, HOME Team, Taxable…) terms and prepayment conditions.

PBV Underwriting Considerations cont. Market Studies – All proposals are subject to MSHDA’s Guidelines for Market Studies. (See Tab C of the Combined Application) Concessions and Inducements - A ¼ percent rate reduction may be available if at least 15% of the units are affordable to a special needs population, where these units are supported with PBV assistance.